Missing payments investigated Criminal investigators check land use office for lost license fees

October 30, 1998|By Andrea F. Siegel | Andrea F. Siegel,SUN STAFF

Anne Arundel County prosecutors have quietly opened a criminal probe into how $4,375 in payments came to be missing from the licensing division of the county land use office.

The state's attorney's office investigation was prompted by an audit in March that found no record of the money going into the county account after it had been taken from customers in exchange for one-day Planning and Code Enforcement licenses for roadside stands, hucksters and parades.

A criminal inquiry into a county office in the Republican administration in an election year is a touchy matter. Incumbent State's Attorney Frank R. Weathersbee, a Democrat, began it on his own in spring without waiting for a referral from the County Council or from County Executive John G. Gary, a Republican running for re-election. His administration would have preferred a Police Department inquiry.

Planning officials gave their paperwork to Weathersbee's office several months ago, but prosecutors and investigators will not discuss details.

This is at least the fifth employee theft inquiry into a county agency in as many years -- including a 1994 case in which the prosecutor's office found that one of its workers stole $12,500 from an office fund. An embezzlement case involving another office is pending; the others resulted in convictions.

County Council Chairman Bert L. Rice said the missing money, as relatively small as the amount is, is a worry. Any impropriety turned up by the county auditor is troubling, he said.

In a September 1997 report, county auditor Teresa Sutherland called Planning and Code Enforcement bookkeeping and recordkeeping inadequate. She said the tasks of calculating fees, collecting payments, creating receipts and maintaining records were not split among employees, which could allow workers to hide embezzlement and perpetrate errors.

Steven R. Cover, PACE director, agreed to consider some of her suggested changes but said he had too few clerical workers to separate financial transactions from related record-keeping jobs. He said using just one cashier to collect money would be inefficient because more than 300 transactions take place daily.

Sutherland's audit depicted a financial system in which payments for licenses could not always be linked to money deposited in the county's account and in which no reliable way existed to reconcile bank, county and license records.

In a sample check of 1997 records, auditors could find no bank deposits for 16 of 58 huckster licenses issued, four of 102 roadside stand licenses issued, and two of 69 parade licenses. One of 386 trade licenses checked was questionable -- nobody could tell if payment was received. The licenses should have brought in $4,375, but the auditors said they could not find deposit records.

"Concerned? Of course I was concerned when they said they couldn't find money," said Victor Sulin, who at the time supervised several licensing divisions in PACE. He speculated that the money went into an incorrect county account.

John R. Hammond, the county's financial officer, said his office could not determine what happened to the money. His office could not find the backup paperwork for its own internal investigation. It located one of the missing deposits -- deposited, but with incorrect receipt information.

The county is in the midst of an $8 million restructuring of its financial systems, driven partly by the need for all computers to work when the calendar rolls from 1999 to 2000.

Thomas C. Andrews, who became the county's chief administrator after being head of land use until about 15 months ago, said, "We recognized that cash handling needed improvement."

A cashier's office, established in 1989 but then abolished, was restored in 1996. Not all payments by people who walked into PACE offices were made to that office until after Sutherland's March report.

In an after-the-fact undercover probe in late spring, police tried to bypass the cashier. Licensing workers refused to take the money.

Since the March audit, several changes have been made or are under way, said licensing chief Frank Ward.

Gary said, "It certainly looks as though there was something not being done right there."

He said that while it "looks bad" when an audit points to shortcomings and missing dollars, both the audits and efforts to root out theft are part of improving county government.